Conversion ― zero-rating non-residential conversions (housing associations)

By Tolley
Conversion ― zero-rating non-residential conversions (housing associations)

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Conversion ― zero-rating non-residential conversions (housing associations)
  • When can conversion services for housing associations be zero-rated?
  • What is a ‘relevant housing association’?
  • What is a non-residential to residential conversion?
  • When are services supplied ‘in the course of conversion’?
  • What kinds of services are excluded from the zero-rating for conversion services?
  • When is a zero-rating certificate required in order to zero-rate conversion services?
  • What happens if only part of a building qualifies for zero-rating?
  • Can zero-rating include the conversion into garages?
  • Practical points ― conversion services supplied to housing associations

This guidance note explains when conversion services supplied to housing associations can be zero-rated.

For an overview of the liability of construction services more broadly, see the Overview ― construction, conversion and renovation guidance note.

In-depth commentary on the legislation and case law on conversion services supplied to housing associations can be found in De Voil Indirect Tax Service V4.240.

When can conversion services for housing associations be zero-rated?

Conversion services are normally excluded from the zero-rating for construction (see the Construction ― zero-rating of construction services guidance note). However, conversion services supplied to housing associations can be zero-rated where the following conditions are met:

  • the supply is to a relevant housing association
  • the conversion is a non-residential to residential conversion
  • there is a supply ‘in the course of conversion’
  • the services are not specifically excluded from zero-rating
  • (where appropriate) the supplier obtains a zero-rating certificate

VATA 1994, Sch 8, Group 5, Item 3, Notes 12, 20

These conditions are explained further in this guidance note.

What is a ‘relevant housing association’?

In order for the conversion services to be zero-rated, they must be supplied to a ‘relevant housing association’, ie one of the following:

  • a private registered provider of social housing
  • a registered social landlord within the meaning of the Housing Act 1996, Part I (Welsh registered social landlords)
  • a registered social landlord within the meaning of the Housing (Scotland) Act 2010 (asp 17) (Scottish registered social landlords)

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